The University of Iowa and UI Community Credit Union officials said they ended a five-year partnership because they couldn't come to an agreement on renewed contractual terms.

The UI signed an agreement with Hills Bank and Trust Co. late last year and the bank will open an IMU branch today.

UI spokesman Tom Moore said Hills Bank provides the same services as the credit union but is more accessible to both students and community.

"University leaders concluded that the proposal from Hills Bank and Trust offered the most benefits to students, faculty, and staff," he said.

Over the next five years, Hills Bank will pay more than $613,000 for branch rental space at the IMU and UI Hospitals and Clinics, according to documents obtained by The Daily Iowan. In all, the contract will cost Hills Bank more than $1 million in exchange for special perks like marketing to students at orientation.

Jim Kelly, a credit-union senior vice president of marketing, said UI officials informed the credit union in July 2011 they would solicit proposals from other providers. The credit union gave the UI two optional two-year extensions, but university officials didn't want to pursue either of those options.

Credit-union officials decided not to participate in the first bid process last August after learning of the UI's new contractual guidelines and conditions.

"After careful review of the proposed guidelines, the [credit union] determined that it would not participate in the bid process," Kelly said. "The new contractual guidelines established by the university did not make financial sense for the 91,000 member-owners that we serve."

Moore said the guidelines for the second and final request for proposal issued last October could be viewed by the credit union as "more relaxed," and the facility presented a proposal on those terms.

The UI's contract with Hills Bank will provide students with the option of linking their Iowa One card with a checking account.

John Benson, a Hills Bank senior vice president of credit and legal administration, said the Iowa One card's banking feature will continue to function like the credit union's, with a black stripe containing banking information and enabling use at ATM or PIN-based locations when linked to a Hills Bank checking account.

Officials anticipate the Iowa One cards will be ready for the upgrade by the end of this school year. Hills Bank-owned ATMs will also have replaced all previously existing ATMs by that time, Moore said.

Hills Bank will install 22 ATMs on campus starting in March, and all locations — except Carver-Hawkeye Arena and Kinnick Stadium — will have no surcharge. The two athletics facilities will assess a $1.50 surcharge.

Students may still use credit-union ATMs at its office locations. Kelly said there are no plans to open any new offices in Iowa City, but they are looking into additional ATM locations.

Kelly said credit-union officials do anticipate a decline in student accounts in the coming year but will continue marketing its services to students.

"Without the exclusive rights to market to incoming freshmen at orientations, we will see a drop off in new student accounts," he said. "… We hope our current branches, call center, and mobile and text banking products can meet the students' needs."